"In the first half of 2021 we want to come out with a resource upgrade for Pickle Crow with a target of 1.5 Moz, and then we will start to work on drilling out the regional areas to move towards 2 Moz, followed by infill drilling. Importantly, we want to sustain the grade around 10 g/t."
What were the circumstances that led you to leave Bellevue Gold and join Auteco Minerals?
My history is in investment banking, but a number of years ago I decided to focus on the companies I had been investing in. The one that really took off was Bellevue Gold, which is now a A$1 billion company with approximately 2 million ounces of gold (Moz/Au) in the indicated and inferred category. One year ago, Bellevue was moving into development, and I left to join Auteco because my expertise is in exploration.
I was attracted to the Pickle Crow gold project because it reminded me of an early-stage Bellevue: an unloved, disused mine, in a tier one jurisdiction, that had been discarded but had great potential. Between 1935 and 1966, Pickle Crow had been one of the most prolific gold mines in Canada, but stopped because gold had fallen to US$35/oz. It still had a lot of mineralization, 170km of data points (drill core), two 1,000m shafts, and 38km of underground infrastructure. Additionally, it can be brought into production for under C$100 million.
Can you tell us about the team behind Auteco?
Marcus Harden, former geologist at Bellevue and now chief geologist at Auteco, found the project through his Canadian contacts. Other members of the Bellevue team also joined to form the Auteco board, including managing director Steve Parsons and chief financial officer Michael Naylor as non-executive directors, and chief geologist Sam Brooks as executive technical director. The team is world-class by any standards.
What happened to the Pickle Crow mine after production stopped in 1966, and how did you come to acquire the asset?
In the 1970s a number of groups had a go at developing the asset, but it was not a contiguous tenement holding. In the 1980s, a small un-listed group dewatered the asset to explore down the incline, but they ran out of money. It was then picked up in 2008 by PC Gold, which did quite a bit of work, but fell upon hard times when the downturn hit in 2013, and were acquired by First Mining (TSX: FF).
In the subsequent years, First Mining compiled a 320km2 land package around Pickle Crow, but had its principal focus 200km north of us at the Springpole project. First Mining preferred its 5 Moz at 1 g/t at Springpole to Pickle Crow’s 1 Moz at 11 g/t, so we approached them to do a low-risk earn-in to acquire the asset. This was structured as a C$100,000 payment and 25 million shares in Auteco when we were trading at A$0.01, with a commitment to spend C$5 million over the next three years to earn 51%, and a further C$5 million up to 70%. Finally, we can take Auteco’s ownership up to 80% for a further C$3 million.
What type of resource do you have at Pickle Crow, and what has exploration revealed so far?
When we acquired the project we knew First Mining had a NI 43-101 resource of 1.25 Moz at circa 4.5 g/t. We knew we could get a substantial resource in there at a higher grade, so for the first few months we reorganized the data and came out with a new resource of 830,000 oz at 11.6 g/t. Then we started drilling, and on September 1st came out with an increased inferred resource of 1 Moz at 11.3 g/t gold (JORC-compliant). We are now embarking upon a 45,000m diamond drilling campaign, which we are about a third of the way through (November 2020).
Which areas of the project are you focusing on with the current drilling campaign, and what potential do you see to grow the resource?
In the three shafts we have 3.8km of strike, which are open in all directions and at depth, and drilling has shown grades including 1.5m of 440 g/t, 2m of 70 g/t and 1m of 800 g/t. Our primary focus is to drill around the shadow of the headframe as well as along strike and at depth. The Central Patricia zone also holds great potential, as it was mined from the 30s with 650,000 oz at 13 g/t, and had a number of great intercepts that were never followed up. We are mobilizing a third rig at the moment to start drilling at the headframe, followed by brownfield areas, and then the regional scale major shear zones.
One of the reasons we love the project is the infrastructure around it, including daily flights, sealed roads, a 24-man winterized field camp, core shacks, generators and an existing mill, allowing for year-round exploration. Pickle Crow is also in the vicinity of champions, including Newmont’s Musselwhite mine to the north and the Red Lake camp to the west.
What is Auteco’s financial position?
Auteco started in January at less than A$0.01 per share and rose to A$0.15 in six months, so we decided to raise, and we were inundated with interest, and closed an oversubscribed A$30.4 million placement in July to support fast-track growth. Our register is over 24% institutional, and we are fully funded for exploration with three drill rigs through 2021.
Where would you like to see the company by the end of 2021?
In the first half of 2021 we want to come out with a resource upgrade target of 1.5 Moz, and then we will start to work on drilling out the regional areas to move towards 2 Moz, followed by infill drilling. Importantly, we want to sustain the grade around 10 g/t. Our team took Bellevue Gold from nothing to A$1 billion in three years, and we intend to move quickly to replicate that success with Auteco.